Spanish giants Real Madrid and Adidas extend partnership of US$1.2bn

Late last month, the word was out that there was a new deal between Spanish giants Real Madrid and Adidas in the works. Confirmations have been announced and the US$1.2bn partnership is one of the biggest in recent times.

The kit deal, that runs through 2028, will be the most lucrative in football history. While financial details of the extension were not disclosed, but it was previously reported that Madrid will be pocketing a whopping €1.1 billion (US$1.2 billion) over the course of the deal, making it the most lucrative deal in football history.

When it comes to merchandising, this means the out-of-form club will reportedly earn up to €152 million (US$169 million) per year, a considerable increase on the estimated €35 million (US$39 million) per year with their existing deal with the German brand. The existing deal was set to expire in 2020.

This new partnership extension will put Zidane’s Madrid in front of their arch-rivals Barcelona, who currently earn a reported €85 million (US$95 million) per year from Nike.

The deal is a result of the high tempo sponsorship battle in the football market. American rivals to Adidas, Nike will be looking to close a deal with ‘miracle’ team Liverpool that could storm ahead of Manchester United’s UK£750 million (US$974 million) deal with Adidas, along with Nike’s extension with Paris Saint-Germain, expectedly tripling their numbers to €75 million (US$83 million) per season.

Puma has also been strong in the game with their agreement for a ten-year UK£650 million (US$844 million) deal with reigning English Premier League giants Manchester City.

Adidas chief executive, Kasper Rosted said, “This agreement will help us to achieve our mission to be the best sports company in the world. It also underpins Adidas’ leadership in the football category.”

Real Madrid has been experiencing one of their worst seasons ever, guaranteed to finish the season without any silverware. With big names in the transfer game in full swing, the Los Blancos will be looking to get back to glory ways soon.